How Your $60 Video Game is Chopped Up

Via the informative folks at FeedVibe, we had this rather illuminating chart that shows exactly how much of your money goes where when you plunk down $60 for a video game.

As digital distribution takes over, I expect to see the 20% handed to the retailer to shrink dramatically. But if you think that all of a sudden games will be 20% cheaper, you’re kidding yourself. More than likely either the console or the publisher will pocket the different and keep charging you the same.

About The Author

Paul

I think I'm a part of the first generation of journalists to skip print media entirely, and I've learned a lot these last few years at Forbes. My work has appeared on TVOvermind, IGN, and most importantly, a segment on The Colbert Report at one point.

You know, I’m not sure where they are getting that 20 percent that they show the retailers acquiring. I worked for a retailer that sold video games, and the profit margin was, at its largest, 17%, and most of the time was 15 or lower. Interesting.

Just like the music industry. Useless middlemen who water down the products are the ones making the most money. And they will use every power at their disposal to make sure the system stays this way. Gawd I hate EA.

It actually makes sense for the publisher to be getting more. As in other industries (film, to name one of many) the non-creative side who puts up the cash gets to reap the most profit. It’s eternally unfortunate that the people whose hearts and souls went into the game get a smaller percentage of the profit, but because they owe it to the big companies who have faith in them, there’s not much that can be done.

no, man, then the game wouldn’t adhere to the creative commons agreement, which is an integral part of open source. the developer could ask for donations, but with open source, its all free. the only product i can think of that doesn’t adhere to this rule and does ask straight up for money first is red hat linux and thats mostly just for the 24/7 live support and other services that aren’t part of red hats code. the developer could do the same here and offer support for the game with some payment and still be legit.

Talking about “a $60 game” is a fundamental flaw in this “game pie”. You cannot get a AAA game for $60 anymore. You can get it for $60 + tax, + DLC + DLC + more DLC + extra this + extra that. Or you can get an $80 or $130 version of the game + DLC + extra everything.

To get a complete game you’re looking at, with the way DLC is right now, making you buy the bare minimum in a game…ie. the disc, and then making you buy all the maps separately, and all the guns separately, you’re looking at about $150 per game….and people keep paying it. It’s disgusting. If you buy 2 Activision partial games (what you get at launch) and then you buy the rest of the game…you’d have spent more money on 2 games than it would cost to buy a brand new console to play them on.

Sure the games are $48-52 a piece but that is before shipping them to the store, then I have to pay employees and all of the expenses associated with operating a store such as rent, electricity, etc, then if I want to sell online Amazon charges 30%, ebay is 10% paypal is 2.75% and I have to pay to ship out the games which is about $2.50 per game

There goes all the profit!

Publishers are the biggest obstacle in making video games profitable

Much like Record Labels in the music industry.

If I want to play Halo 5 I have to sell 10 copies just to get a free one for myself.

“As digital distribution takes over, I expect to see the 20% handed to the retailer to shrink dramatically. But if you think that all of a sudden games will be 20% cheaper, you’re kidding yourself. More than likely either the console or the publisher will pocket the different and keep charging you the same.”
Except on Steam.

So by releaseing the game on PC and bypassing Steam, Sony, Microsoft and Nintendo and the retail sector, they could either sell the games at half the price or cash it all in. It’s a big cut they are all taking that could go to developing a better game.